African leaders had a new message for foreign companies seeking the diamonds, gold, rubies and emeralds so plentiful in desperate dirt-poor countries and so pricey when polished and sold in New York, Paris and Switzerland.
We’re no longer a cheap date.
That message – in so many words – was heard again and again at this year’s posh African Mining Indaba – a glittering conference in Cape Town, South Africa, that unites investors, mining companies, governments and stakeholders from around the world with the single goal of advancing mining on the African continent.
To be honest, not every African leader was threatening to pull “unusual tax incentives” from contracts with western companies. But at least one president drew a line in the sand, declaring it was simply unjust that Africa, rich in minerals sought after by the world, should remain inhabited by the poorest people in the world.
Mining deals must be more beneficial for Africa, declared Ghana’s President Nana Akufo-Addo, as he pressed governments to end fiscal incentives traditionally used to attract investments in countries rich in resources but considered high risk.
“We want you here for the long-term,” he continued, addressing the mining executives from wealthy countries. “Respect the land that provides the riches and be part of the transformation. It’s time to make Africa prosperous and allow her people to attain a dignified standard of living.”
“We should not have to give unusual tax and royalties incentives. And mining companies should not expect to make extraordinary profits on our continent.”
Over the past decade, a number of African governments have reviewed mining contracts, seeking to increase their share of mining profits.
Last year, the Democratic Republic of Congo – the world’s biggest producer of cobalt – rewrote its mining code, ignoring the objections of miners. It cancelled existing stability clauses in contracts and raised royalty rates across the board.
Neighboring Tanzania, once one of Africa’s best bets for international investors, also cracked down, hitting gold miner Acacia with a $190 billion tax bill.
The company has disputed the claim and its parent company Barrick Gold Corp is in talks with the government.
But other African nations, including Angola and Ethiopia, are still seeking to use tax breaks to entice investment to their nascent mining sectors.
Resource nationalism was high on the agenda at the just ended 25th African Mining Indaba.
Long a major gold producer, Ghana is now seeking to develop its iron ore and bauxite deposits.
“Africa has made the world rich with our minerals, our gemstones adorn crowns and homes around the world, it is time to make Africa prosperous, and enable her people to attain a dignified standard of living. Join us in this exciting project for sustainable economic growth,” President Akufo-Addo said.